Delaware’s Chancery Court scheduled Wednesday afternoon for its first hearing to figure out how quickly it has to deal with arguments involving National Amusements’ right to replace five Viacom directors, and what happens at the media company until the judges rule.
The court likely will consolidate two related actions at the 2 PM ET session: Last week Sumner Redstone-controlled National Amusements, which owns 80% of Viacom’s voting shares, asked the court to affirm its move to replace five directors including CEO Philippe Dauman. Viacom also asked for an expedited ruling overturning the effort.
Judges must come up with a scheduling order that sets out how quickly the case progresses. They also need a status quo order, addressing how Viacom will be governed until the case is resolved.
Lawyers have until 4 PM ET tomorrow to file papers about these topics. The court asked them to “confer before the hearing to see if they can reach agreement.”
National Amusements said last week that typically “such cases are given priority by the Delaware courts and resolved far more quickly than other cases.” It added that it expects judges to keep the Viacom board intact for now, but limit directors to ordinary business decisions.
That could scuttle Dauman’s effort to sell a 49% stake in Paramount.
Although the case involves a decision by the board of National Amusements, Viacom told the court last week that it believes the process was tainted: The company believes that Redstone, 93, is incompetent, and being manipulated by his daughter Shari, who’s President of National Amusements and Vice Chair of Viacom and CBS.
Viacom wants to dig deeply into Sumner Redstone’s communications with Shari as well as his decision-making ability, as part of its effort to go to trial within 100 days.
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